The central warehouse location problem revisited

This paper is concerned with the optimal location of a central warehouse, given a fixed number and the locations of the local warehouses. We investigate whether the solution determined by the traditional model that minimizes total transportation cost differs from the one determined by a model that also takes into account the inventory and service costs. We build simple models to address this question. Numerical results show that ignoring inventory costs in modelling location models may lead to inferior location solutions.